The Economic Impact of Smoke-Free Laws on Restaurants and Bars in 9 States

INTRODUCTION: Smoke-free air laws in restaurants and bars protect patrons and workers from involuntary exposure to secondhand smoke, but owners often express concern that such laws will harm their businesses. The primary objective of this study was to estimate the association between local smoke-free air laws and economic outcomes in restaurants and bars in 8 states without statewide smoke-free air laws: Alabama, Indiana, Kentucky, Mississippi, Missouri, South Carolina, Texas, and West Virginia. A secondary objective was to examine the economic impact of a 2010 statewide smoke-free restaurant and bar law in North Carolina. METHODS: Using quarterly data from 2000 through 2010, we estimated dynamic panel data models for employment and sales in restaurants and bars. The models controlled for smoke-free laws, general economic activity, cigarette sales, and seasonality. We included data from 216 smoke-free cities and counties in the analysis. During the study period, only North Carolina had a statewide law banning smoking in restaurants or bars. Separate models were estimated for each state. RESULTS: In West Virginia, smoke-free laws were associated with a significant increase of approximately 1% in restaurant employment. In the remaining 8 states, we found no significant association between smoke-free laws and employment or sales in restaurants and bars. CONCLUSION: Results suggest that smoke-free laws did not have an adverse economic impact on restaurants or bars in any of the states studied; they provided a small economic benefit in 1 state. On the basis of these findings, we would not expect a statewide smoke-free law in Alabama, Indiana, Kentucky, Missouri, Mississippi, South Carolina, Texas, or West Virginia to have an adverse economic impact on restaurants or bars in those states.